This week, it was announced California would require solar panels on all new home construction in the state starting in 2020. (Some municipalities, like San Francisco and South Miami, Florida, already have such requirements in place.)

This will drive up home prices and cut into homebuilders' bottom lines, to be sure. But it's also a welcome boost for the solar industry, which has faced several head winds so far in the Trump era, from international trade wars that have levied 30% tariffs on Chinese-made solar components to the president pulling the country out of the Paris Climate Agreement.

It's no secret the Trump administration loves fossil fuels. But it's too late to turn back the clock on solar, as the sector is booming, both at home and abroad. Solar is already the fastest-growing power source in the world—probably because, in many instances, it's also cheaper than fossil fuels.

With the fifth-largest economy in the world throwing its weight behind solar, it's clear that bright times (sorry) lie ahead for the space. And that's going to mean good things for the solar industry ETF.

TAN Outshines SPY

TAN is the only pure-play solar ETF remaining; a rival fund from VanEck closed its doors last year. The fund is a narrow, concentrated play of 23 names, each ranked by their revenues from solar-related business. The portfolio skews toward U.S. firms, and given the growth nature of the industry, small-caps.

With $381 million in assets under management, TAN has strong daily trading volume ($2.81 million) and relatively tight spreads (0.13%). Yet with a 0.70 expense ratio, the fund doesn't come cheap. Historically, however, the fund's vigorous securities lending activity has helped it offset that charge many times over. (Read more at "Is Securities Lending Good For Investors?")

Though TAN is down 0.52% year-to-date, it's up a whopping 41.2% over a one-year period. That's almost triple the 12-month return of the SPDR S&P 500 ETF Trust (SPY).